New to solar net metering? Here’s what you need to know about your state

One of the many benefits of going solar is the idea of ​​being able to bank cash or credit when you generate excess energy.

This is called net metering or net billing, but not all states or utilities offer it.

Each state has its own policies regarding net metering, so it can be difficult to determine exactly what net metering means for you.

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Net metering allows solar panel owners to offset their energy usage by transferring the excess energy they produce to the utility grid. In some cases, utility customers who enroll in net metering programs can save on their electricity bills or earn a profit by producing more energy than is needed to power their homes.

To help you understand what net metering is, we answered the biggest questions you need to know when researching net metering policies in your area.

Here are the basics of net metering: what it is, how to get it, and how to find out if your state has it.

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What is net metering?

Net metering is a general term for the practice of compensating solar panel owners for excess energy produced. If you are connected to the grid and have solar panels installed on your home, there are periods when you can power your home solely from the solar panels and periods when you need to power your home from the grid. Power your home.

Ben Delman, public relations director for Solar United Neighbors, a solar energy cooperative, said, “During the day, people are off from work, the lights aren't on, and the lights in their homes aren't working.'' It is said that something may happen.the sun is shining [and] It sends electrons back through the electricity meter. ”

In this situation, Delman said, net metering is “a fair credit system that allows solar owners to earn credits for the electricity they generate but don't use.”

Utility companies evaluate the energy they send into your system by seeing how much power you're drawing from the grid and how much power you're getting back. If you're feeding more energy into the grid than you're using, these credits can reduce your energy bill.

Most states have net metering laws, but policies vary from state to state and even from utility company to utility company. Some states have caps on the amount of credits you can receive from surplus electricity. Some allow you to roll over the credits you generate from month to month. Some states may have net metering policies that apply only to certain types of utilities, while other states may have net metering policies that apply to all utilities within the state. will be done.

Here, let's take a look at the types of net metering policies each state has and which ones don't have one.

Net metering by state

Note: These net metering policies are for residential electricity customers only and are accurate as of August 18, 2023. Programs, policies and laws can change frequently, so we recommend checking with your local government, utility company or energy provider to confirm.

What is the difference between online billing and net metering?

Net billing works similarly to net metering. The main difference is the lower compensation rate for excess energy. Any excess power is sent back to the grid and credited to your utility bill.

But there's a catch. Net metering gives you the retail price, or open market price, of electricity, Delman explains. Net billing allows you to get wholesale value, or the cost to the utility of purchasing energy, he said.

Because net bills are credited at a lower rate than net metering, Delman believes some utilities are adopting net billing rather than net metering as a way to save money.

Each state and utility company has different regulations and policies regarding this practice. As with net metering, contacting your local utility company is the easiest way to get the information you need for your home.

A small number of states have adopted variations of the net billing model in which customers receive a portion of the retail price of their electricity fed back into the system. For example, California transitioned to a new net energy metering program this spring. California's previous program, called NEM 2.0, gave utility customers a credit for the full retail price of the energy they supplied to the grid, essentially allowing them to buy back the energy they supplied to the grid at the selling price. I made it possible to do this.

Under the revised program, called NEM 3.0, utilities will buy back energy at lower rates during the day and higher rates at night. The California Solar Energy and Storage Association estimates that under NEM 3.0, average coverage rates for solar customers will decrease by 75%. One of the aims of the new net metering policy is to encourage people to use solar cells instead of relying on the grid to store excess energy.

Generac solar cells in the garage on a sunny day Generac solar cells in the garage on a sunny day

If net metering is not suitable, solar cells may be the best choice.


What if my state doesn't have a net metering law?

Some states do not have official net metering. or The net billing method applies, but instead there is something called a solar power purchase program. These programs work similarly to net metering and net billing. The excess energy that your solar panels generate and send back to the grid is given to you. The only difference is the rate paid, which varies for each solar power purchase program.

In some cases, local utility companies, rather than the state, may have net metering policies, even if the state does not have a formal law governing net metering policies. Our research shows that every state has some form of net metering, net billing, or other solar power buyback program, whether the program is administered by the state or by the utility. To do. Again, the best way to identify a specific net metering, net billing, or other solar buyback program is to contact your solar installer or local utility company.

However, in some cases it may be more beneficial to invest in solar cells and store the excess energy produced for use during non-daylight hours. If you want to learn more about solar cells, check out this article on why solar cells are the best choice.

“The important thing for consumers considering solar power generation is [to] Be sure to ask the right questions of your instructor. Then the instructor will be able to explain it to you in detail,” Delman said.

To learn more about net metering and solar power, check out our articles on how to avoid too-good-to-be-true solar power scams and how to estimate the number of solar panels you need for your home.

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